Disc menu text distorted

I have a problem with the menu text and scene images being distorted and blurry. I simply clicked on 'disc menus' and chose 'outdoor wedding' and entered a main title with a bit of text (standard font) and the text and images looks terrible in the preview and the text is badly distorted in the finished burned DVD.
The footage was shot with a Panasonic HDC-SD60 at HA1920 in PAL. I have not mixed any other format of footage in the project. There is just one still image at the end that I created in PE and I have created a title at the beginning of the footage against a black to fading in image. The title is just text.
The footage itself seems fine on the finished DVD, it's just the disc menu looks awful and it's just a standard disc menu option without any real tweaking. I find adding and adjusting text to this menu to be very unuser friendly, so I've stuck to the standard font and tried not to muck about with it too much. (On a slight detour - all my scenes start from a fade in so all the scene images are black. I try to adjust the green dots on the timeline and this changes the images on the scenes menu but it also starts the scenes from here. Is there a way to add a picture to these scene boxes without it starting from there?)
Any help offered is great appreciated thanks.
Chris.

The workflow that I would use would be:
Create a New Project in HD to match the Source Footage 100%
Edit, Saving along the way
When finished, do a Save_As, changing the name a bit, like adding "final_HD" to it
Do all of the BD authoring in that Project, with HD Menu Sets, etc.
Burn to BD from that Save_As Project
Go back to the original Project (before the Save_As), Open it, and Export/Share to DV-AVI w/ 48KHz 16-bit PCM/WAV Audio
Create a New Project in DV (NTSC, or PAL), in Widescreen 16:9 w/ 48KHz 16-bit Audio
Import the DV-AVI
Edit, if necessary, but probably not
Do all of the DVD authoring in that Project, with Widescreen Menu Sets, etc.
Burn to DVD, using only high-quality blank media, like Verbatim, Taiyo-Yuden or Falcon Pro
Hope that helps,
Hunt

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